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Intellectual Property Rights Protection in China and Hong Kong
Jurjen GrootExternal Expert / China IPR SME Helpdesk
Sandanski, 20 November 2015
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Today’s speaker
Name: Jurjen GrootFirm: CMSLocation: Utrecht, The Netherlands
Jurjen Groot advises European clients on corporate, commercial and intellectual property matters related to their business in China. He worked 3 years for CMS in Shanghai and currently works for CMS in The Netherlands.
Jurjen’s recent IP related work includes advising a Dutch market leader in optical fiber on licensing and IP protection matters, assisting a world known Dutch innovative storm umbrella company on its IP protection and anti-counterfeiting strategy in China, and advising a winner of the Shell Livewire Young Business Award on protection of its IP in China.
220 November 2015
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Agenda
20 November 2015
• IPR Protection in China: Framework
• Types of IPR in China
– Registration / Application
• Enforcement of IPR in China
• IPR Protection in Hong Kong
• Case studies & Lessons Learned
• Take-away messages
• Overview China and South-East Asia IPR SME Helpdesks
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IPR Protection in China: Framework
20 November 2015
• Fast changing landscape, substantial improvements
• Extensive laws and regulations developed
• First to file/register system
• Separate national IP systems: protected in home market(s) does not
(automatically) mean protected in China!
• Infringement is almost inevitable, but enforcement is possible: choose your
product specific IPR strategy & pick your battles!
Patents
520 November 2015
• Different patents in China:
– Invention Patents (20 years protection, application 3 – 5 years)
– Utility Models (10 years protection, application appr. 8 months)
– Industrial Design (10 years protection)
• Costs: 3500 – 11500 euros
• Chinese translation needed
Types of IPR in China
620 November 2015
• Patents: PRC Patent Law and Implementation Rules
– Invention Patents
– Utility Models
– Industrial Design
• Trade marks: PRC Trademark Law and Implementation Rules
• Copyright: PRC Copyright Law
• Domain names: Measures Administration Internet Domain Names
Patents
720 November 2015
• Different patents in China:
– Invention Patents (20 years protection, application 3 – 5 years)
– Utility Models (10 years protection, application appr. 8 months)
– Industrial Design (10 years protection)
• Costs: 3500 – 11500 euro
• Chinese translation needed
Trademarks
820 November 2015
• “First come first serve”, be sure to be first! Others can register your trade
mark in China, can cause big trouble
• Advisable to also register Chinese translation of trade mark
• Registration period: 12 to 18 months
• Protection period: 10 years, can be renewed
• Costs: appr. 250 euros
Trademarks – new PRC Trademark Law
920 November 2015
• Entered into effect on 1 May 2014
• Multiclass applications possible
• Higher compensation amounts (6 x higher) and administrative fines (5 x
higher)
• Stricter on bad faith registration: registration rejected if applicant has a
contractual or business relation with the (in China non-registered) right
holder and knows of the prior right’s existence. However: strict enough?
Copyrights
1020 November 2015
• Originate automatically by creation of the work
• However: can be registered in China with Copyright Protection Center of
China
• After registration: Copyright Registration Certificate, can be very helpful
to prove that the copyright is yours
• But beware of software (source codes)!
Enforcement of IPR in China
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• Cease and desist letter
• Administrative proceedings
• Civil court proceedings
• Criminal proceedings
• Customs protection
Cease and Desist Letter
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• Quick and can be quite effective
• Strong signal that you are serious about protection your IPR
• If important infringers: be sure to first finish investigation/gather evidence
• Letters can also be sent to online shops (e.g. Taobao, Alibaba)
Administrative Proceedings
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• Trademark: AIC (powerful)
• Patent: SIPO (less powerful)
• Can be very quick and effective
• Raids and injunctions
• No financial compensation possible
Civil Court Proceedings
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• Specialized IP divisions in most Intermediate and High Courts
• Compensation of damages possible
• However: not always adequate compensation
– 90 pct of cases below $100,000
– not seldom small % of total damages claimed
• Complicated invention patent infringements
Criminal Proceedings
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• Local Public Security Bureau (PSB)
• Effectiveness varies
• Beware: no longer control of the case
Customs Protection
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• IPR can be registered with customs
• On the basis of random checks
• Most effective for trade marks
• Can be combined with Customs Protection in EU
• Free Customs service
• Be sure to “educate” Customs about products and infringers
Enforcement (2)
Criminal Actions
• Customs raid and seizure
Copyright
Trade Marks
Shadow Companies
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Case Study I: Trade Marks & Customs
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Foreign company A has a good reputation in western fashion industry. Has own brand for shoes and clothes. Products manufactured in China, sold in Europe. A only registered TM for shoes in China. Competitor B has registered TM for clothes in China similar to A’s TM for shoes. B has also recorded that TM with China Customs. When company A shipped its clothes from China, Chinese customs detained the goods, and confiscated because of TM infringement.
Case Study I: Lessons Learned
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• Trade mark registration must fully cover all
goods of your company.
• Your trade mark is only protected in China if
registered in China.
• Customs registration can be effective way of
trade mark protection, also against you if you
didn’t register your trade mark(!!)
Case Study II: Industrial Design & Exhibition
2020 November 2015
Foreign company T designed a tractor, which was manufactured in China under OEM by company M. Their self-designed OEM agreement stated that IPR on this tractor remains with company T. After exhibiting the tractor on a fair in Europe, public feedback: engine too small.
Case Study II: Industrial Design & Exhibition
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Company T and M jointly designed a bigger engine tractor. Company T then started to register industrial design in Europe and in China. But: T discovered that M had already registered in China(!).
T ended relationship with manufacturer and acquired another Chinese manufacturer to produce its tractors. M then sued T in China for infringement of their registered industrial design. Also, they requested the Customs to seize the T’s products, so that it could no longer export.
Case Study II – Legal Actions
2220 November 2015
T then came to our law firm. 1st step: start industrial design invalidation proceedings with SIPO in Beijing, with argument: lack of novelty. We won SIPO proceedings. M appealed in court, and finally even Beijing High Court, with no success. Local court proceedings also decided in favor of our client T. Total time spent: 2 – 3 years
Result: Industrial design of competitor cancelled and no more legal proceedings against client: it could manufacture and export again. However: no way to prevent competitor from also doing so: no favorable market position(!). Also, T could not claim contractual damages for breach of OEM agreement, because wording only covered first (small engine) tractor model.
Case Study II – Lessons Learned
2320 November 2015
• Registration in both Europe and China too late: big consequences!
• Ineffective OEM agreement: self-made agreement did not offer sufficient
IP protection, T with empty hands against M.
• Customs protection can be very effective – also against you!
• Displaying product on fair before registration IP very risky.
• Uphill battle because competitor had certificates and client did not.
• Must be registered with the Trademarks Registry in Hong Kong
• 10 years, renewable
• 45 classes - multi-class applications available
20 November 2015
IPR Protection in Hong Kong – Trade marks
ApplicationApplication
Deficiency CheckingDeficiency Checking
Search and ExaminationSearch and Examination
Publication for OppositionPublication for Opposition
HearingHearing
RegistrationRegistration
20 November 2015
IPR Protection in Hong Kong – Trade marks (2)
Standard Patents• The State Intellectual Property Office• The United Kingdom Patent Office• The European Patent Office in respect of patent designating
the U.K.• 20 years
Two Stage Application Procedure:
• Request to record published patent application• Request for registration and grant
20 November 2015
IPR Protection in Hong Kong – Patents
Short Term Patents• 8 years• Formality examination only
Single Stage Application Procedure:• Direct application in Hong Kong
Patent Reform• Dual system maintained• Original Patent Grant• Regulate patent attorneys and agents
20 November 2015
IPR Protection in Hong Kong – Patents (2)
Civil Actions
1. Cease and desist letters
2. Litigation - mediation
3. Interim injunctions / Mareva injunctions
4. Anton-Piller Order / Norwich Pharmacal Order
5. Trial
6. Copyright Tribunal
20 November 2015
Enforcing your IP in Hong Kong
Take-away messages
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• Be sure to file first (before your Chinese partner/competitor!)
• Register your trademark (preferably also Chinese translation) in China
• Protecting your IP should be part of your business model
• Careful with samples and exhibitions
• Your website is also accessible in China…
China and South-East Asia IPR SME Helpdesks
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Enquiry Helplines
IP Guides & Newsletters
E-learning & Business Tools
Training Workshops& Live WebinarsWebsites & Blog
Enquiry Helpline
• IPR one-to-one consultations: E-mail, telephone, face-to-face• First-line advice on China countries IPR matters• Confidential• Delivered by China IPR specialists• Available for EU SMEs and SME intermediaries
[email protected]+86 (10) 64620892
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Information & Materials
• Library of publications:– IP specific guides, incl. patents & trade marks– Industry specific guides, incl. textiles, machinery, creative industries– Business guides, incl. technology transfer– Hong Kong and Macao Factsheets
• Quarterly Helpdesk newsletters• Article placement• Topical blog posts
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Training workshops & webinars
Workshops across Europe and China• Addressing general IPR and industry specific IPR matters
• Trainings delivered in several languages
• Free one-to-one consultations• Webinars: Save time by joining these interactive training sessions from
your own office or watch recordings online
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Online portal
• Practical IPR guides• E-learning modules• Case study catalogue• FAQs• Helpdesk newsletters• Event information• Latest blog posts• Helpdesk videos
www.china-iprhelpdesk.eu
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The China IPR SME Helpdesk provides free, confidential, business-focused advice to European Small and Medium Enterprises (SMEs) relating to IPR in
China
Helpdesk Enquiry Service / Training & Events: [email protected] MaterialsOnline Services -www.china-iprhelpdesk.eu
For more information about our services and how the China IPR SME : Telephone/Hotline: +86 (10) 6462 0892
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Feedback Questions Discussion
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